Managed Care Organizations can cut administrative costs through streamlined contracts, automation, self-service

January 24, 2016

Managed Care Executive compiled tips from several experts on ways MCOs can reduce administrative costs - the costs health plans have the most control over and the greatest ability to reduce. Health plan experts say continual strategic change is key to controlling administrative costs, and that plans that don't adopt this philosophy will fall behind. Among the tips:

  1. Health plans should stop focusing on individual improvements, and instead adopt a culture of change focused on optimizing efficiency.
  2. Non value-added complexity is a huge cost for health plans, and there is very little coordination and integration on the administrative side.
  3. Transactional activities, such as claims processing, offer opportunities to use automation to reduce administrative costs and reduce errors.
  4. Self-service capabilities such as those enabled by online portals or automated telephone systems can significantly reduce health plans' costs of handling these inquiries;
  5. Outsourcing non-core administrative activities can help manage administrative expense
  6. Many health plans have utilization management programs that require providers to obtain prior-authorization for certain types of services, but plans should be strategic in how they implement it.
  7. Plans are starting to invest in analytics to improve their ability to target care management programs toward members most likely to benefit from participation.
  8. Health plans that operate most efficiently have eliminated paper provider directories and moved to electronic document delivery for correspondence and other paperwork, such as explanations of benefits. They are also promoting electronic funds transfers to pay providers.
  9. Promote electronic attachments transaction standards for claim, prior authorization, and referral authorization transactions.